Weekly Economic Outlook: February 16-22, 2026
- Remin Francis I R
- 18 hours ago
- 2 min read
The latest data gives us a clearer picture of where the Indian economy stands as we move deeper into 2026. Growth momentum is visible, inflation is shifting, and global trends are slowly turning supportive.
India’s wholesale inflation picked up pace in January 2026. Wholesale prices rose 1.81% year-on-year, higher than December’s 0.83% and above expectations of 1.25%. The main push came from manufacturing, where inflation accelerated to 2.86% from 1.82%. Textiles (2.48%) and wearing apparel (2.08%) saw stronger price growth.
Food prices also made a comeback. Wholesale food inflation rose 1.41%, compared to zero growth in December. Vegetables jumped 6.78%, reversing the earlier decline, and prices of eggs, meat, and fish rose 3.66%. However, fuel continued to provide relief. Wholesale fuel prices fell 4.01%, the sharpest drop since October 2024, with petrol, diesel, and LPG all in deflation.
On the growth side, business activity remains strong. The HSBC India Composite PMI climbed to 59.3 in February, the highest since last November. Manufacturing PMI rose to 57.5, and Services PMI held strong at 58.4. This shows solid expansion in both factories and services, supported by domestic demand and improving exports. Foreign exchange reserves also hit a record $725,730 million, giving policymakers comfort.
However, there are some soft spots. India’s unemployment rate edged up to 5.0% in January from 4.8%, with urban unemployment at 7.0%. Meanwhile, the merchandise trade deficit widened sharply to $34.68 billion, as imports surged 19.2% to $71.24 billion, while exports rose just 0.6% to $36.56 billion.
Globally, inflation trends are easing. UK inflation cooled to 3.0%, Canada’s to 2.3%, and Japan’s to 1.5%. That’s a positive signal for global rate stability.
Overall, the picture is mixed but stable, growth momentum is intact, inflation is manageable, and external buffers are strong. The key watch points remain jobs and the trade deficit.
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